Saxo Bank Quarterly Outlook: "The Crisis Is Not Contained"

The Crisis Is Not Contained, by Saxo Bank

Comments

[Number 156]

In a word: Scary.

We should call it "The Book of Fear"

Greek 2-year yields are now trading above 8.6% again,
but the equity market seemingly only cares about
the next earnings season (beginning in July), which is
expected to be strong.

What?

[kathy.chamberli...]

oh S A X O   bank, very dear to this mother's heart.

gone, frank and andy back to Luxembourg,

we will see if team SAXO bank stays solvent. bless banks that sponsor cycling.

Rabobank - About us

[Moneygrove]

+ 1,000

[Caviar Emptor]

Since March 2009, the market values lies at a higher premium than hard facts. The lie/truth valuation ratio is gradually reverting to the mean, however. If the ratio falls below 1, we may get another market crash. We haven't valued the truth more than the lies since before the dot com days

[three chord sloth]

Well, duh!

The Euros never dealt with the PIIGS crisis at all, they just floated them enough money to kick it down the road. The day of reckoning was just delayed; the price to be paid only raised...

Japan is still filled with zombie banks, inept bureaucrats, and empty bassinets...

America is still trapped in a pincer movement between the Keynesian spendaholics and the free-trade-forever clingers...

... And no one is willing to confront the predatory nature of China and the Asian Model of development that creates much of the unemployment and wage deflation, and therefore the debt bombs, scattered throughout the developed world.

The PTB can change it all, yet they don't... so therefore they must want it.

[bigdumbnugly]

"The Crisis is not Contained."

Didn't they lift that title from the little-known B horror flick in which Lon Chaney Jr. made his (failed) debute?

Thankfully for him and all of us there were better scripts awaiting him in his future.

[Number 156]

I dont feel confident in the accuracy of some of the points made in their report. Especially this:

Greek 2-year yields are now trading above 8.6% again,
but the equity market seemingly only cares about
the next earnings season (beginning in July), which is
expected to be strong.

Maybe Im not getting it. 

We expect growth in the US to slow to 1.5%
and 0.5% qoq annualized in Q3 and Q4 respectively.
Furthermore we do see a high risk of a double dip
when entering into 2011.

Uh, we never left the first dip, you Dip.

They continue...

The impact on earnings in our scenario is a 14%
growth in earnings for S&P500 for 2010, -1% in 2011
and 10% in 2012. Consensus is currently higher with
an expectation of 35% earnings growth in 2010, 17%
in 2011 and 14% in 2010.

We will see about this. I am going to put this in my calendar. My bet is during that time, we have another Bloomberg news release containing the phrase 'unexpectedly lower'.

[JethroBodien]

Love it.  A Jim Cramer banner ad on Zero Hedge

Does the man have no shame!

[Moneygrove]

Ask Erin Burnett ??????????

[Bigger Dickus]

I will lake her my wife when I strike it rich by shorting AMD to 2 bucks.

[kathy.chamberli...]

I would lake her too, big dickus. filling in where i left off.

[trx]

"Some countries escaped the turmoil relatively unscathed – but they won’t be so lucky this next time around as global growth begins to weaken in coming months. That’s because Australia, Canada, New Zealand, Norway and Sweden (an exporter, if not a commodity exporter) are all suffering under the weight of tremendous housing bubbles – each of them worse than the US housing bubble in terms of price appreciation from 2002 levels. When these bubbles pop in a weak global environment, this is likely to serve as a double whammy to these countries.”

"Particularly Australia and Canad are at risk. Those currencies are the strongest, and the private indebtedness is as bad, or worse, than it has ever been in the US or the UK. This story could begin to unfold already in Q3 – and there are already signs that Australia’s housing market is turning over. The commodity currency levels could look very different when 2011 rolls around."

[Sudden Debt]

The greeks have yet to enter the second phase of the crisis, the worst phase.

For now, greek citizens can still rent money from banks at 9.65% and if you want to buy a house you can still loan money at 4.92% fixed.

These rates will soon go around 14% to 20% just like in the 80's.

This will also be the faith of all western governments that are seriously indebted. And that is when the consumer will surrender and really go down.

Banks on the other hand... will profit very well from this... and will feel no shame in taken the bits and pieces that are left from the taxpayers.

[Squid-puppets a...]

Australia's housing bubble will deflate, but not pop.

Its got increasing population and housing stock shortage - we didnt overbuild like elsewhere

not that I would be upset if it popped outright, I hope the whole ponzi gets clean-slated everywhere simultaneously.

[Sudden Debt]

Imagine every economie in the world is a hooker, and the all stand in line.

If you say, I'm going to pop every single one of them, I believe you.

But all at the same time? I don't think so...

Moral of the story: all in due time

[Janice]

How dare you diminish the respect of hookers.....to compare them to corrupt economies.

[old_turk]

Oh, if that bit of magic happens, can we Yanks borrow your gurus for a bit.  We have lots of bubbles left and they don't need to be poppin'.  Seriously.

BTW, spent 2 years in Sale, Victoria a long time ago.

[exportbank]

Vancouver has the highest residential real estate prices in North America, Toronto is the condo capital of the world but 40% of those are owned by "investors" outside of Canada. Prices have started to fall as sales have slowed dramatically over the past month. House prices are substantially higher in Canada than in the US and Canadians can't deduct mortgage interest so in cash-flow terms the monthly carrying costs are extremely high. Canadian personal debt levels are also a bit higher than in the US - Canada may not suffer a major collapse but it doesn't paint a bright picture going forward. Ontario has painted itself into a gigantic structural deficit and taxes and fees are exploding - of course they also face a huge public sector pension problem and health care costs. The current government has a plan for the future based on "when things get back to normal"..

[kathy.chamberli...]

B U B B L E   B U B B L E

Olympics inflated bubble. plus weather, r a i n i n g, always running for cover into the highest residential real estate homes. nice though, if you have some sun shining, real nice.